Key pullouts from Costco’s earnings report
Contributor since / Followers
BING-JHEN HONG
Costco Wholesale (NASDAQ:COST) traded slightly lower in late action on Thursday after posting a mixed FQ4 earnings that featured 1.0% year-over-year revenue growth.
Market share is on the rise
Comparable sales were up +5.4% during the quarter. The big box retailer said comparable sales were 5.3% higher in the U.S., rose 5.5% in Canada, and were 5.7% higher in international markets. E-commerce sales rose 18.9% during the quarter. After backing out gas prices and F/X swings, comparable sales were up 6.3% in the U.S. vs. +6.0% consensus and were 6.9% higher overall vs. +6.4% consensus. Adjusted e-commerce sales were up 19.5%. One of the most important pullouts from the retailer’s earnings report is that it continues to nab market share from retails peers, including Walmart (WMT) and Target (TGT), on both a comparable store basis and with its e-commerce business.
Profits may go higher
Costco (COST) topped estimates on the EPS line by $0.07 per share to mark its fifth profit beat in a row. The diluted EPS tally of $5.29 was also higher than the $4.87 mark from a year ago. Membership fee income was $1.51 billion vs $1.54 billion consensus and $1.51 billion a year ago. Importantly, the company’s membership fee increase did not start until September 1, which means it will be future quarters that see the boost. Net income for the quarter was $2.35 billion, vs. $2.16 billion a year ago.
International push
Costco (COST) saw strong traffic at its new store in Okinawa during the quarter as the brand continues to grow out. Costco (COST) currently operates 891 warehouses, including 614 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 35 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, and one each in Iceland, New Zealand and Sweden. Costco (COST) also operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.
Shares of Costco (COST) dipped 0.9% in postmarket trading on Thursday to $895.55. The stock is up more than 35% on a year-to-date basis.